business law mid 1

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1

why national economies are weak or strong x6

dependence theory
natural resources
education and technology
climate
private market
law and the legal system

2

define law x2

made up of rules
rules laid down by the state and backed up by enforcement

3

types of ownership/property fences x3

public property
private property
common property

4

property laws x11

constitutional law
administrative and regulatory law
criminal law
tort law
law of business organizations
antitrust law
security laws
environmental law
labor and antidiscrimination law
corporate governance law
contract law

5

main types of jurisprudence x5

natural law
positive law
historical school
sociological jurisprudence
legal realism

6

constitutional interpretations of law x2

common law
civil law

7

types of public law x3

constitutional law
administrative law
criminal law

8

types of private law x3

property law
contract law
tort law

9

types of lawsuit x2

civil law
criminal law

10

purpose of administrative agencies x3

regulate business activity through adoption of rules and regulations
investigate business for rule and regulation violation
prosecute illegal violation of administrative rule and regulation

11

citation 313 N.W.2d 601 (1982) x5

313 - volume
N.W. - Northwestern Reporter
2d - 2nd edition
601 - page
(1982) - case decided in 1982

12

advantages of case law x3

stare decisis, follow possible interpretation of law determined by judge in prior case
certainty and predictability of law
become secure in their right of property

13

disadvantages of case law x5

volume of cases
conflicting precedents
dicta
reject precedence
conflicts of the law

14

hierarchy of source of law from high to low x8

US Constitution and Amendments
Statutes/act/legislation of Congress
Federal administration regulation
State Constitutions
State statutes
State administrative regulation
Local ordinances
Case law

15

sanctions for criminal conduct x5

death
imprisonment
fine
removal from office
disqualification from holding any office and from voting

16

intentional tort x4

assault
battery
conversion
trespass

17

sanctions for tortious conduct x3

intentional torts
negligence
strict liability

18

reasons for rising concern over business ethic x3

public education and family structure
economic interdependence
news media and the internet

19

gov steps in when business fail to make ethical decision x2

business leader want to limit gov regulation
federal law reduce criminal punishment for companies that take certain steps to control their ethical conduct

20

ethics and law both... x2

consist of rules to guide conduct and foster social cooperation
what is right and wrong

21

differences in ethics and law...x2

legal system is an institution of the state
motivation

22

system of ethics x2

formalism
consequentialism

23

types of formalism x2

Kant and Formalism
Social Contract Theory

24

Kant and Formalism x2

to be ethical requires you act with good intent
to have good intent, have to act in ways that are ethically consistent

25

The Social Contract x6

Theory based not on duty but on contract and agreement
how to construct a just society given the many inequalities of wealth, knowledge, and social status
Free selves from knowledge improves our ability to evaluate the terms of contract under which we enter society or join an organization
Everyone entitled to certain equal basic rights
inequalities must be based on what a person does, not who a person is, and everyone must have an equal opportunity of achievement
Emphasis on individual rights and self-worth, has origin in formalism

26

types of consequentialism x2

utilitarianism
protestant ethics

27

utilitarianism x2

end justify the mean
consider alternatives

28

business ethics focus more on consequentialism x2

certain values are important because end result is useful in increasing productivity and profit rather than because values are intrinsically good
value-based management

29

business ethics in protestant ethics x3

hard work, success, rational planning without original absolute moral values
modern bureaucratic managerial system
business action justified by usefulness in accomplishing the goal

30

formalism x3

absolutism
morality of actions
am I willing to permit others to act in this way?

31

consequentialism x3

relativism
morality of actions
do the results promote the common good?

32

common ethical values found in law x5

Liberty and rights
Good faith
Due care
Confidentiality
Conflicts of interest

33

liberty and rights x4

right of privacy
right of promoting equal employment opportunity
freedom of expression
due process of law

34

professional code of ethics x2

have specific codes in what and what not to do in each profession
self-regulation in order to prevent state to regulate these professions

35

topics that organizational codes of business ethics should cover x15

fundamental honesty and adherence to the law
product safety and quality
health and safety in the workplace
conflicts of interest
fairness in marketing
financial reporting
supplier relationships
pricing, billing, and contracting
trading in securities/using inside information
payment to obtain business
acquire and using info about others
security
political activities
protection og the environment
intellectual property

36

questions to ask self if acting ethically/morally x5

Have I thought about the action I may take is right or wrong?
Will I be proud to tell my action to my family? Employer? News Media?
Am I willing for everyone to act as I am thinking of acting?
Will my decision cause harm to others or to the environment?
Will my acts violate the law?

37

obstacles in achieving an ethical business corporation x3

emphasis on profit
effect of the group
control of resources by non-owners

38

steps in achieving an ethical business corporation x3

involvement of top management
openness in communication
consideration of all stakeholders

39

observation on ethics and self regulation x4

Profits and business ethics are not contradictory
Ethical organizational life is a basic business asset that should be accepted and encouraged
Ethics are of continuing concern to the business community
Business ethics reflect business leadership

40

why are formal legal rules alone not an adequate ethical system for business x2

lacks flexibility
inadequately informed

41

the morality of property x2

criticism of property
support of property

42

criticism of property x3

how can some possess more resources than they need while others go hungry and homeless
power over others conveyed by possession of great capital resources
culture of values, education, and info that surrounds us and influences us is the creation of all of us

43

support of property x4

cannot go back to some time in nature when there were no resource allocation problems
more resources that can be put under the legal system of property the less wastefully those resources will be treated
adequate property in resources maximizes total wealth in society
enforcing legally exclusive rights to resources is a just system (poor may benefit)

44

ethical/legal problems that arise in business x7

fairness of employment
race, gender, religion, disability, sexual orientation
environmental and pollution problems
anti-competitiveness issues (price fixing)
marketing fairness conflict between managerial self interest
conflicts of interest in accounting when conducting audit of company that is paying you

45

justices x5

reviewing court persons, decide an appeal
Give reason for deciding their decisions
Consider result between parties but total effect of decision on the law
Concerned with issues of law (issues of fact resolved at trail court)
Spend time studying briefs, record of proceedings, and law in reaching decisions

46

trial judges x7

determines the applicable rules of law to be used to decide the case
Procedural or substantive
Main link between the law and the citizens it serves
Have the duty to observe and to apply constitutional limitations and guarantees
Judge is responsible for deciding questions of law
Cases without jury, judge is responsible for finding facts
Cases with jury, function of jury is to decide questions of fact

47

why have some states eliminated unanimous jury decision? x4

jurors not qualified to distinguish fact from fiction
vote their prejudice
emotions too easily swayed
not constitutionally mandated

48

largest jury verdicts x4

medical malpractice
products liability
fraud
breach of contract

49

lawyer's duty x4

administration of justice
Should see proceedings are conducted in a dignified and orderly manner and that issues are tried on their merits only
promote justice
Lawyer’s duty to each client require highest degree of fidelity, loyalty, and integrity

50

lawyers serve as... x3

counselor
advocate
public servant

51

State court involves x2

state constitutions provide general framework for court system
state legislature enacts statutes that add body to the framework

52

state court process x3

supreme court
appellate division
court of appeals (writ)
SC (writ)

53

trial court, x3, x1

district court
circuit court
superior court
responsible for determining both the facts and the law in the case

54

federal court involves x4

questions of federal law
United States as a party
controversies among the states
certain suits between citizens of different states

55

federal court x4

federal district court
12 US Courts of Appeal
special court of appeals
Supreme Court

56

US Supreme court decision x6

petition for writ of certiorari to the Supreme Court
Petition for writ of certiorari is requested by losing party in court of appeals for permission to file an appeal with the US Supreme Court
SC’s decision becomes law of land and reconciles the division of opinion between lower courts
Writ granted if 4/9 justices vote to take the case
Federal district courts and courts of appeal cannot review, retry, or correct judicial errors charged against a state court
Must concern federal question involving validity of state action on grounds that the statute under review is repugnant to Constitution, treaties, or laws of US

57

types of judiciary x3

judicial review
judicial restraint
judicial activism

58

Judicial restraint x6

courts are overseeing coequal branches of government
Commitment to constitutional system dictates that this almost unlimited power be exercised with great restraint
Strict constructionism
Judicial abstention
Have deep commitment to precedent
Decisions are based on the facts than principle of law

59

Judicial activism x4

Courts must provide leadership in bringing about social, political, and economic change
Constitutional issues must be decided within the context of contemporary society and that the meaning of the Constitution is relative to the times in which it is being interpreted
Tend to be more result conscious and to place less reliance on precedent
typical left or right alignment of justices may result in false impressions of judiciary

60

alternatives of judicial process x3

May decide case by use of existing statutes and precedents and demonstrate commitment to common law system
May refuse to apply existing case law or declare statute to be void as unconstitutional
If no statute or case law, court may decide case and create law in process

61

judicial process if answer not established by statute or precedent x2

Ratio decidendi: must extract from precedents the underlying principle
Must determine the path or direction along which principle is to work and develop

62

standing to sue x5

plaintiff must establish that they are entitled to have the court decide on the dispute, that they have standing to sue
plaintiff must allege that litigation involves a case or controversy
plaintiff must allege a personal stake in the resolution of the controversy
courts can insist there be adversarial relationship between plaintiff and defendant
presence of standing determined by nature and source of plaintiff’s allegations (cognizable right, interest, injury)

63

personal jurisdiction x3

Personal jurisdiction: court must have authority over the parties to the case
Personal jurisdiction over plaintiff is obtained when plaintiff files the suit
Long-arm statutes: provide service of process beyond boundaries (of state)

64

allow court to obtain jurisdiction over defendant though beyond border/criminal jurisdiction x3, x1

Has committed a tort within the state
Owns property within state that is the subject matter of the lawsuit
Has entered into contract within state or transacted the business that is the subject matter of the lawsuit within the state
In criminal suits, crime must have been committed within the state for the court to have jurisdiction over the case

65

federal courts discourage class action suit x3

require members of the class be given actual notice whose names and addresses can be found through reasonable efforts
plaintiff must pay all court costs of action
if trial denies plaintiff right to represent class, decision cannot be appealed until there is final decision against lawsuit itself

66

pretrial procedures x8

Plaintiff files complaint
complaints and summons served on defendant
defendant files motion or answer with possible counterclaim and defenses
court rules on motions
plaintiff files reply to answer
attorneys conduct discovery procedures
parties may file motions for summary judgment or judgment on pleadings
court conducts pretrial conference

67

pleadings x5

file complaint
issue summon
defendant answer/default/counterclaim
plaintiff reply to counterclaim
pleadings give notice of each part's contentions and serve as boundary lines of the litigation

68

purpose in discovery x4

ensure results of lawsuits are based on merits of controversy and not on ability, skill, or cunning of counsel
each side is aware of all the facts involved in the case and of the intentions of the parties
permitting parties to learn how a witness will answer questions prior to actual questioning at the trial
Narrows dispute by parties

69

methods of discovery x4

interrogatories
request for production of documents
depositions
request for an admission

70

pretrial motions

Motion to dismiss (including for statute of limitations)
motion for judgment on the pleadings
motion for summary judgment
motion: frivolous litigation/Rule 11
motion to compel discovery
motion in limine (excluding evidence from trial)

71

trial steps x10

voir dire - parties and attorneys select jury
attorneys present opening statements
plaintiff presents evidence through witness
defendant moves for directed verdict/judgment as a matter of law
defendant presents evidence through witnesses
attorneys present closing arguments
court instructs jury on the law
jury deliberates and makes decision (verdict)
judge enters judgment on verdict
losing party files posttrial motion

72

burden of proof x2

Burden of proof: Burden or responsibility that a person has to come forward with evidence on a particular issue
Burden of persuasion: describe responsibility a person has to be persuasive as to a specific fact

73

Burden of proof criminal/civil case x1, x2

beyond a reasonable doubt
preponderance of evidence
clear and convincing proof

74

party dissatisfied with jury's verdict can seek... x2

notwithstanding verdict (state)
motion for judgment as matter of law (federal)

75

appellate procedures x7

party receiving adverse judgment files notice of appeal
parties file briefs in reviewing court
oral argument made in reviewing court
reviewing court announces decision
further review may be requested by petition to higher court
higher court allows or denies further review
final decision

76

enforcement of judgment and decrees x

court assists to execute judgment
Execution of judgment occurs when court official seizes some property of the debtor, sells it at public auction, and applies proceeds to creditor
Garnishment: having portion of debtor’s wages paid in court, which in turn pays the creditor

77

peremptory challenge prohibit... x3

race
gender
religion

78

responses in negotiation x5

Compete
avoid
compromise
collaborate
accommodate

79

seven elements of principled, interest-based negotiations x7

communication
relationship
interests
options
legitimacy
alternatives
commitment

80

Options in alternative dispute resolution x5

Negotiated settlement
mediation
arbitration
focus groups
trial and appeal

81

businesses tend not to dispute with customers because... x2

Not good business from goodwill and public relations standpoint to sue a customer
Juries frequently sympathetic to individuals who have suits against large corporations or defendants who are covered by insurance

82

benefit of parties conducting focus groups x3

Attorneys assemble a group of citizens and present their evidence => group deliberates and makes findings
Dress rehearsal gives attorneys insight into possible jury reaction to evidence and points up weaknesses in the case
Reality test help disputing parties to engage in more meaningful negotiations

83

arbitration x3

disputing parties agree to have third party decide merits of dispute to avoid various expenses of litigation
Provide quick and inexpensive resolution of disputes
Advantage of submitting many disputes to experts for solutions

84

process of arbitration x3

submission
hearing by arbitrator
award/decision

85

court and submission x3

Most state statutes authorizing voluntary arbitration require agreement to arbitrate to be in writing
Most statutes require submission within stated time period (6 months) after dispute arises
Parties that contracted to arbitrate are not required to arbitrate any matters other than those they contractually agree to arbitrate
Court hearing case decides issue of arbitrability but does not decide issue between parties

86

issues submitted to arbitration x2

Question of fact, questions of law, or mixed
May include interpretation of arbitration agreement

87

arbitrators x5

arbitrators generally chosen by disputing parties
expertise
number chosen
no licensing requirements
authority over certain matters

88

Arbitration Awards x5

Award does not need to set forth findings of fact, conclusions of law, or reasons for award BUT disclosure of findings and reasons must be given if applicable statute, arbitration agreement, or submission so requires
When arbitrator provide basis for decision in form of opinion or letter, document becomes part of the award
Court will make every reasonable presumption in favor of the arbitration award and arbitrator’s acts and proceedings
Awards are not subject to judicial review on merits of decision
After award is made, if no objections, it becomes final and enforceable, like a judgment

89

impact of Federal Arbitration Act on (federal) policy x3

Court assumes arbitration intended unless it can say with positive assurance that arbitration clause was not intended to include the particular dispute
Arbitration agreements “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for revocation of any contract”
SC supports, but does not allow collective-bargaining agreement’s arbitration clause to prevent an individual worker form using the court to pursue a Title VII claim of discrimination

90

impact of Federal Arbitration Act on state laws x3

state laws favoring litigation as the means to resolve a dispute
Sometimes a state law specifically provides that designated matters are not to be submitted to arbitration
State laws cannot prevent arbitration of disputes if parties are engaged in or impact interstate commerce

91

statutorily mandated arbitration x3

Arbitrators in mandatory arbitration process are retired judges and practicing lawyers, usually experienced trial attorneys
Mandatory arbitration cases usually present panel of three
Arbitrators paid per-diem fee

92

types of cases in statutorily mandated arbitration x3

Claims for money of small amount, those less than $15000, not including interest and costs
Some statutes require arbitration of specific subject matters
Arbitration required only in cases which a party has demanded a jury trial, as it can be assumed that judge hearing a case is basically as efficient as an arbitrator

93

process in statutorily mandated arbitration x5

Place claim in arbitration track at time of filing
Discovery procedures may be used prior to hearing on arbitration
Most discovery is by interrogatories than be deposition
Arbitrators have power to determine admissibility of evidence and to decide law and facts of case
States have different rules relating to admissibility of evidence

94

Judicial Review of Voluntary/Contract-Based Arbitration Awards x4

Results from voluntary arbitration procedures are final
Arbitration clauses are liberally interpreted when issue contested is the scope of the clause
The fact that arbitrator made error rulings during hearing, or reach error findings is no ground for setting aside award because parties agreed he or she should be the judge of all facts
Courts do not interfere with award by examining merits of controversy

95

Judicial Review of statutorily mandated arbitration x7

Statutorily mandated arbitration requires a higher level of judicial review of the reward
Subjected to numerous constitutional challenges
Mandatory arbitration constitutional if fair procedures are provided by legislature and ultimate judicial review is available
De novo judicial review: court tries the issues anew if no arbitration occurred
Recording of proceedings required
Require de novo review of interpretation and application of law by arbitrators
Right to reject award and proceed to trial is the sole remedy of party dissatisfied with the award

96

statutorily mandated arbitration unconstitutional if... x3

Deprive one of property and liberty of contract without due process of law
Violate litigant’s seventh amendment right to a jury trial and state’s constitutional access to court provisions
Result in unconstitutional delegation of legislative or judicial power in violation of state constitutional separation of power provisions

97

According to Federal Arbitration Act, Arbitration award may be vacated on any one of four grounds x4

Where award was procured by corruption, fraud, or other undue means
Where arbitrators were obviously partial or corrupt
Where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy or by engaging in any other misbehavior by which the rights of any party have been prejudiced
Where arbitrators exceeded their powers or so imperfectly executed them that a mutual, final, and definite award upon subject matter submitted was not made

98

According to Federal Arbitration Act, arbitral misconduct includes... x5

Participation in communications with a party or a witness without the knowledge or consent of the other party
Receipt of evidence as to a material fact without notice to a party
Holding hearings or conducting deliberations in the absence of a member of an arbitration panel or rendering an award without consulting a panel member
Undertaking an independent investigation into a material matter after the close of hearings without notice to the parties
Accepting gifts or other hospitality from a party during the proceedings

99

mediation x5

Cannot impose binding solution on parties
May have agreement for mediation before dispute arose or parties may agree that mediation should be attempted as alternative to litigation- trial judge can require disputing parties to submit to mediation process before a complaint can be litigated formally
Disputing parties retain control over when to settle and when to continue dispute
Cost savings compared to litigation and arbitration
Must win trust of parties

100

procedures in mediation x6

Explain procedure and parties should agree
Parties’ opening statement
Parties’ exchange (dialogue/negotiation)
Brainstorm possible options (or solutions)
Agreement written and signed
Private sessions or caucuses (optional at mediator’s discretion)

101

Advantage to mediation x3

Disputing parties retain control over resolution of their controversy
Does not involve informal presentation of evidence
When parties progressing forward mediation can be continued and expanded to involve possible agreement on other potential disputes; when mediation not aid parties, any of them can stop process but stating they will not participate further

102

Disadvantage to mediation x3

Parties retain control over controversy
Parties must be able to agree on who will be their mediator
Training mediator not universally defined

103

Property x6

Absolute but not infinite, boundaries can be ambiguous
The right to exclude others from interfering with you resource
Ambiguity of what resources can or cannot be objects of property protection
Property law not function well when it is not adequately enforced
Property is the necessary foundation for private enterprise and market in the modern nation
Rules are different ways of applying the private fence

104

types of basic legal framework x2

property system
state planning system

105

laws as contributing factors to prosperity... x3

property promotes incentive
property generates prosperity by establishing the conditions necessary for capital formation
resources are easily divisible

106

types of capital formation x2

mortgage
corporations and stocks

107

basic divisions of property x2

real property
personal property

108

fixtures in real property x4

Physical annexation (attachment) to land or buildings
Whose use has become closely associated with use to which the land is put
Unless agreed differently, fixtures go with land to buyers
Sellers and buyers should identify which fixtures stay with buyers and which things remain protected under personal property and go with the sellers

109

personal property x2

tangible property
intangible property

110

Ways of acquiring resources in a property x5

exchange
possession
confusion
accession
gift

111

contract rules x4

Makes agreements to exchange resources between owners legally binding and enforceable
Make it possible for owners to commit legally into future exchanges of resources
Possible for one owner to sue another if agreements to exchange resources in the future are broken by one of the owners
Allow lawsuits against those who have not adequately performed their agreements

112

adverse possession occurs under state statute when possession is ... x5

Open and notorious
Actual and exclusive
Continuous
Wrongful
For a prescribed period of time

113

in acquiring resources through gift, donor... x2

Intends to make the gift
Delivers gift by physical transfer to the done

114

types of ownership x4

fee simple
life estate
leasehold estate
concurrent ownership

115

fee simple x3

fee simple
fee simple absolute
fee simple defeasible

116

life estate x4

life estate
reversion
granter
remainder

117

leasehold estate x4

Unless prohibit by lease, rights owned by tenants can be capitalized by transfer to someone else
Definite duration
indefinite duration
at will

118

concurrent ownership x5

concurrent ownership
joint tenancy
right in survivorship
tenancy in common
partition

119

types of deeds x3

warranty deed
special warranty deed
quitclaim deed

120

protection against ownership of land x2

kind of deed buyer receives from seller
Law enables buyers to register deeds to land and lenders to register their mortgage claims against land

121

Private legal fence of property allows an owner to exclude others from interfering with...x3

Possession of an object or resource
Transfer of object or interest by gift or through exchange with other owners
All uses of object that do not harm other owners in what belongs to them

122

types of easements x3

natural easement
negative easement
easement by prescription

123

categories of bailment x3

Sole benefit of the bailor
Sole benefit of the bailee
Mutual benefit of both parties

124

types of security interest in land x3

mortgages
deeds of trust
land sales contracts

125

process of security interest in land x4

recording statutes
foreclosure
deficiency
redemtion

126

secured transactions vial attachment takes place when... x3

Secured party has given value
Debtor owns the collateral
Security agreement is given